- Posted by Amy Spagnola
- On August 10, 2016
- 0 Comments
The Cost of Winning an Olympic Medal = Big Bucks
For those who are victorious at this year’s summer 2016 Olympic games, there is a lot to celebrate. From sudden stardom to endorsements and publicity, those like Michael Phelps and Simone Biles are sure to have financial freedom in their future. But what about those medals? Does the IRS take a cut?
Athletes in Rio who win medals are awarded with cash prizes and this means they owe money to the government. For cash prizes, much like the lottery or gaming wins, there is a taxation rate of 39%. Monetary bonuses mean that Phelps and company could take home much more than $25,000 per gold medal. The USA Swimming Foundation and other groups offer stipends and extra cash for medals.
Members of Congress are arguing against a “victory tax” but others are arguing that winnings are simply akin to getting a bonus at work and should be taxed accordingly. After all, athletes already deduct travel, training and other expenses, so they might have to suffer a little financial hit from winning big in Rio.